Minister: Flood of Imports Pressures Indonesian Industry

Indonesian Minister of Industry Agus Gumiwang Kartasasmita highlighted the pressures facing the Indonesian industry at the Antara Business Forum 2026. The minister stated that while Indonesia boasts numerous factories, the domestic market's absorption of local products remains a challenge. In his speech at the Fairmont Hotel in Central Jakarta on September 23, 2026, Agus described the industry as being squeezed from three fronts: flooded imports, geopolitical tensions, and rising oil prices, along with diminishing purchasing power.

According to Agus, Indonesia's domestic market, estimated at around 287 million people with a yearly household consumption of Rp12,834 trillion, is one of the country's most significant strengths. The minister pointed out that 78.39 percent of Indonesia's manufacturing output is absorbed domestically, with only about 22 percent directed towards exports. This strong domestic market makes Indonesia an attractive target for imported products during periods of excess global production capacity.

However, industrial utilization in Indonesia stands at 64.8 percent, indicating that many factories and machines remain underused. Agus suggested that increasing utilization could boost production, employment, and taxes without necessitating additional investments. He argued that by enhancing utilization, the government could automatically generate increased production, employment, and tax revenues.

Agus emphasized that for the government to succeed in this endeavor, it must ensure that the domestic market is filled with competitively priced products that gain consumer trust. The minister framed this issue as part of a new national industrialization strategy aimed at navigating global economic and geopolitical shifts. He stressed the importance of the government strengthening policies to safeguard the domestic market, lower costs, and enhance the competitiveness of the national industry.